The Internal Revenue Service (IRS) is responsible for administering and enforcing federal tax laws in the United States. When you file your taxes, several processes occur within the IRS:
- Tax Return Receipt: When you submit your tax return, either electronically or by mail, the IRS acknowledges receipt. If you e-file, you receive an electronic confirmation; if you mail a paper return, you typically get a return receipt notice.
- Data Entry and Processing: IRS staff or automated systems enter the information from your tax return into their databases. They check for basic errors and missing information during this process.
- Assessment of Tax Liability: The IRS calculates your tax liability based on the information provided in your return. They assess the amount of taxes you owe, which may include income tax, self-employment tax, and any other applicable taxes.
- Refunds: If you’re owed a refund because you overpaid your taxes through withholding or estimated payments, the IRS will process your refund. This is usually done via direct deposit if you provided your bank account information. Otherwise, you receive a paper check.
- Tax Audits: In some cases, the IRS may select your tax return for an audit. Audits can be random or based on certain red flags in your return. If you’re audited, the IRS will request additional documentation and review your return more thoroughly.
- Communication: If there are discrepancies or issues with your tax return, the IRS may send you a letter or notice. It’s essential to address these promptly and provide the requested information or documentation.
- Payment Arrangements: If you owe taxes but can’t pay the full amount, the IRS offers various payment options, including installment agreements and offers in compromise. They work with taxpayers to find a manageable way to settle their tax debts.
- Collections: If you ignore tax debts or don’t make payment arrangements, the IRS can take actions such as wage garnishment, bank levies, and property liens to collect what you owe.
- Appeals: If you disagree with the IRS’s assessment or actions, you have the right to appeal their decisions. This involves a review by an independent appeals officer.
- Taxpayer Assistance: The IRS provides assistance through various channels, including phone support, in-person help at Taxpayer Assistance Centers, and online resources. They can help answer questions, provide guidance, and assist with tax-related issues.
It’s important to note that the IRS’s primary goal is to ensure taxpayers are compliant with tax laws and that they pay the correct amount of taxes owed. Most taxpayers have routine interactions with the IRS when filing their annual tax returns, while others may engage with the IRS for various reasons, including audits or resolving tax issues. Being proactive, honest, and organized when dealing with the IRS can help ensure a smoother process.